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Labour's Minimum Wage Scam
When you hear of a Conservative politician praising Labour for creating a 'flexible job market' that benefits British employers it does not ring true. What Lord Freud was really praising the government for was letting bosses screw their workers by turning a full time job into a part time job. Not the sort of jobs policy you expect from Labour but we're always said they are more Tory than the Tories.

Labour's Minimum Wage Scam
by Ian R Thorpe.
2010-02-04
CREATIVE COMMONS: Attribute, non commercial, no derivs.
KEYWORDS: employment, job, jobs, work, employees, employers, labour, conservative, government, Thatcherite, politics, political, economy, recession, minimum wage, poverty

My son walked in last night, one of the nights he must spend at home to maintain the appearance that he and his girlfriend are not co-habiting. He was mightily pissed off about something her had heard on Radio while driving from the office. Somebody - and I can't give details not having heard the item myself - had revealed the Conservatives, when in power, intend to abolish the minimum wage.

They very likely do, their track record says it all. David's outrage was understandable. Having recently learned he is likely to be made redundant due to the closure of the call centre where he now works, his third redundancy in five years, he could well be in the position of being forced into a low paid job or face having his benefits suspended. And with professional gigs few and far between these days he cannot supplement his income through music as he has in the past.

The minimum wage is often cites to back up the Labour governments claims of progress on the "war on poverty" but such claims are just part of Labour's war on truth. Minimum wage regulations are not quite what they seem to be. Under Gordon Brown's stewardship of the economy and then the government Labour have in fact spread poverty by stealth.

It is fine to point to the minimum hourly rate and claim to have helped poorly paid workers. What Labour politicians are less keen to talk about is the reduction in hours worked and the switch to part time working which has imposed on many people a need to hold multiple jobs, many of which escape the minimum wage laws because they are only a few hours a week, in order to make ends meet.

Only yesterday a former Labour business adviser turned Conservative peer, Lord Freud praising Labour for creating a flexible job market.

A Conservative peer congratulating Labour's employment policy? It's enough to make your hair pop out and your eyes stand on end. But Freud was toying with Labour as became clear when he explained he was contrasting Britain's reaction to the job-subsidising policies enacted in Germany and elsewhere. Labour's policy of letting employers effectively reduce wages by cutting hours but requiring the same amount of work may be storing up long-term problems.

Freud explained to peers in The House Of Lords that he was "congratulating the government on not subsidising a process of adjustment to a new economic reality but allowing the market and the contract between employers and employees to hold sway even though it is the employees who take the hit."

In other words The Noble Lord was congratulating Labour on it's Thatcherite hire-'em-and-fire-'em approach to unemployment.

It seems neither of the main parties is capable of learning from the current skills shortage the folly of such a policy. While Labour make claim their allowing employers to reduce pay by stealth has saved half a million jobs in the recession they are only storing up more problems for the future. And the future will commence just as soon as the inflationary pressures building in the economy force interest rates to start rising again.

The main benefit to the government of changing the job of a minimum wage earner from 35 hours a week to twenty five hours a week does not affect the unemployment statistics. It does however have a drastic effect on the individual or family whose income is reduced.

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